News Analysis December 2015

General News Summary

Terror Wave Continues

Three months after it started, there are indications that the wave of terror attacks against Israeli civilians may have slowed slightly but is way from disappearing. Palestinians and Israeli alike seem to be getting used to the idea that casualties from attacks, mostly by Palestinian individuals with little or no connection to terror organizations, are something they have to get used to, like injuries from automobile accidents, without any goal to aspire for, as far as the Palestinians are concerned.

The number of Israeli casualties has been relatively low, though extremely painful in a small country where almost everyone has personal and familial connections. The situation is taken most seriously by Israelis in the West Bank and Jerusalem, where most of the stabbings and vehicle attacks take place. But in the rest of the country, terror’s main accomplishment, if one can use the word “accomplishment” at all – is an uneasy awareness of personal security and an increase in the volume of the Israeli ongoing internal debate over the future of Judea and Samaria.

Motivation for the attackers, many of whom are young people, seems to have shifted. In the first days, the perceived alleged preposterous threat that Israel was about to make changes in the status quo on the Temple Mount (Haram al-Sharif in Arabic), Islam’s third holiest site. Israeli sources now suggest that personal hopelessness, religious fervor and the “copycat factor,” new terrorists inspired by the deeds of previous attackers who in many cases knowingly have sacrificed their lives by attacking Israelis, are playing a larger role.

Many Palestinians – including Palestinian President Mahmoud Abbas, and the Palestinian media – refer to the fact that most attackers are killed on the spot by Israeli security forces as executions. Israel explains that it is conducted in order to stop terror while it is occurring.

Israel has increased its security presence in the West Bank, and the Palestinian Authority has deployed its security forces to prevent confrontations with Israeli soldiers. Neither has been effective so far in stopping individual Palestinians from driving their cars into a bus stop filled with Israelis or a military checkpoint, or taking a kitchen knife and going out to stab Israelis.

So far, Prime Minister Benjamin Netanyahu and Defense Minister Moshe (Bogie) Ya’alon have resisted the Israeli right’s demands for stronger measures in an effort to stop the violence. Though Netanyahu and his supporters constantly have sought to blame Abbas personally for what they see as incitement of the attacks, the PM and DM do understand that such actions could bring about the downfall of the already-weak Abbas, trigger chaos across the Palestinian territories and force Israel, against its will and to its extreme detriment on the international political scene, to retake the administration of the West Bank it ceded more than two decades ago when the PA was established. That restraint, though, may be fragile: One major terror event could change the rules of the game and bring about a chaos that nobody on either side really wants.

Kerry’s Warning

Continuing violence and diplomatic stalemate could lead to the collapse of the Palestinian Authority and resumed Israeli rule over the West Bank, a one-state solution to the Israeli-Palestinian dispute that would severely endanger both Israelis and Palestinians, Secretary of State John Kerry warned in early December.

Speaking at the Saban Forum, at the Brookings Institution in Washington, Kerry put at least some of the responsibility on each of the parties. The Palestinian leadership, he said, must do more to prevent violent attacks against Israelis; at the same time, emphasizing that Israel cannot allow the PA to disintegrate, which would compromise Israel’s future as a democratic Jewish state.

Kerry’s statements came less than a month after President Barack Obama and Prime Minister Benjamin Netanyahu’s apparently conciliatory meeting at the White House, during which Netanyahu said he had not given up on a two-state solution. After the meeting, the Israeli leader spoke of “shared interests,” values and a shared destiny, and discussed Israel’s request for an increase in annual military aid from the current $3.1B to $4B.

Syrian Limitations

Russia’s deployment of super-advanced S-400 anti-aircraft missile batteries and state-of-the-art aircraft into the Syrian theater has imposed limitations on Israel’s freedom of action on the Syrian-Lebanese front, principally in the interception and destruction of advanced arms shipments to Hezbollah forces on in South Lebanon. Of particular concern is the S-400, a multi-missile system whose effective range of 400 km puts half of Israel’s airspace, including civilian Ben-Gurion International Airport, within its reach. However, as long as the missiles are in the hands of Russia, after Netanyahu and President Vladimir Putin have come to general agreement on the conduct of operations in Syria, including coordination between the military forces of the two countries.

As expected, Israel is keeping a watchful eye over political and military developments in Syria, including the recent U.N. endorsement of a peace plan for its war-torn neighbor and the U.S.-Russian dialogue on the continuing battle against the Islamic State (ISIS). The international press has also reported that Hezbollah, Israel’s principal adversary on its northern border, has suffered severe losses — possibly amounting to as many as 1,000-1,500 dead — in the ranks of the Shiite terror organization’s elite forces deployed in defense of the Bashar al-Assad regime in Syria.

Turkish Reconciliation Nearer?

Israeli-Turkish relations may be on the mend, five years after the rapid deterioration following the Israel Navy’s interception of the “Mavi Marmara” ship on its way to Gaza, in which nine Turkish activists were killed. The move follows a secret meeting in Switzerland between high Israeli and Turkish officials, at a time when Turkey is at odds with Russia over its downing of a Russian warplane that violated its airspace, its role in the Syrian civil war and its purchase of oil from the Islamic State. Turkish President Recep Tayyip Erdogan, who has been hostile to Israel, recently said the region needs normalization of his country’s relations with Israel.

PM Benjamin Netanyahu’s office said the two sides had agreed on an Israeli fund to compensate families of the nine Turks killed on the Mavi Marmara when it tried to break Israel’s naval blockade of Gaza, Turkish dropping of other claims stemming from the Mavi Marmara incident, and the mutual return of ambassadors to Ankara and to Tel Aviv, where the Turkish embassy is located.

However, one senior Israeli official admitted that no agreement had been reached on another Turkish demand, that Israel lift its blockade of the Gaza Strip which the Mavi Marmara was trying to break. “Erdogan is on record as predicating the normalization of relations with Israel on a total lifting of the blockade on Gaza,” the official told the Haaretz. “There are ideas but no solution to the issue yet.”

Gas Agreement Signed, but…

Prime Minister Benjamin Netanyahu has a landmark agreement designed to pave the way to development of the country’s offshore gas reserves by a consortium led by Israel’s Delek Group and Texas-based Noble Energy. Opponents of the agreement appealed already to the Supreme Court to nullify it, which is widely believed to be denied

One of Israel’s offshore gas fields, Tamar, is already in production. The Noble–Delek consortium has not moved ahead at the much larger undersea Leviathan site until a clarification of regulatory uncertainty. Opponents of the deal contend the agreement is too favorable to the drillers, depriving Israeli consumers and taxpayers of benefits of the unprecedented energy bonanza. For his part, Netanyahu calls the deal critical to national security interests. “The framework is essential to our security,” he said. “It’s important to our economy, because it gives us an inexpensive energy source and allows us to develop very large income.”

Netanyahu took the proposal to the Knesset Economic Committee, in a “consultation” required by law, then ignored a party-line vote in the panel where the opposition holds a majority.

Prof. Zvi Ekstein, dean of the School of Economics at the IDC in Herzliya, says the gas deal will bring cheaper energy, cleaner energy, many billions of shekels in taxes, but that the agreement should have been reached five years ago when the fields were first discovered. He said gas could improve regional ties with countries like Jordan, Turkey and Egypt, which is not likely to enjoy the benefits of its own huge offshore gas field for years and needs Israeli gas in the interim.

Earlier, operators of the Leviathan field were discussing a deal in which Israeli gas would be piped to Egypt. The partners — Israeli’s Avner Oil, Delek Drilling and Ratio Oil Exploration, together with Noble Energy of the U.S. — signed a non-binding letter of intent with Dolphinus, an Egyptian company. If agreement is reached, about 4 billion cubic meters of gas would be transported to Ashkelon via Israel’s domestic gas pipeline, then on Egypt in the existing EMG pipeline across the Sinai peninsula, which was originally developed to transport gas from west to east. In early December, Egypt froze the negotiations after arbitrators ordered it to pay the Israel Electric Corp. $1.76B in damages for cutting off supplies of the gas to the Israeli utility in 2012.

In a separate development, British Gas has become a partner of Noble Energy and Delek Drilling in the future development of Cyprus’s Aphrodite natural gas field, in the Cypriot Exclusive Economic Zone in the Mediterranean just west of Israel’s Leviathan field. Cyprus and Israel agreed on their maritime border in the Mediterranean five years ago.

Jordan Pilots Visit Israel

Reports in the Jordanian and Israeli press indicate that Jordanian military pilots recently paid a “working visit” to Israel. One pilot was dismissed from the Royal Jordanian Air Force, the reports said, because he refused to join the visit, saying he had joined the RJAF to fight Israel, not visit it. In August, both countries’ air forces took part in joint maneuvers at a U.S. air base in Nevada.

Another Mini-Series Sold

Rights to “Nevelot” (Bastards), an Israeli TV mini-series adapted from a book by Israeli novelist Yoram Kaniuk, has been sold to the US TV giant HBO. The series, originally broadcast in Israel five years ago, is about two embittered veterans of the pre-State Palmah underground who seek revenge on what they see as an indifferent society and its pampered youth.

The Economy

Budget Passes – Finally

After 11 months without a formal government budget, the Knesset passed a joint budget for 2015 and 2016 on November 11. The budget for 2015, during which the government has been operating without a budget, amounted to NIS 329.5; the sum approved for next year is NIS 347B, with a deficit target amounting to 2.9% of GDP. For the first 11 months of 2015, government ministries were allotted a pro-rated 1/12th of their allocations in the 2014 budget.

Passage came a day after Finance Minister Moshe Kahlon and Defense Minister Moshe (Bogie) Ya’alon agreed on a framework agreement designed to end decades of budgetary bickering between their two ministries. The document stipulates “full transparency between the ministries,” at the same time guaranteeing the defense establishment a multi-year budget to provide “budget certainty” and implementation of existing IDF long-term plans. In receiving these concessions, defense agreed to a series of structural reforms including significant reductions in spending on wages and pensions.

Simhon Named

Prof. Avi Simhon of the Hebrew University of Jerusalem is the new head of the National Economic Council. Prime Minister Netanyahu named Simhon, 56, who unsuccessfully ran for a place on the Likud party Knesset ticket in 2013, replaces Prof. Eugene Kandel, who left the post last summer.

Nuclear Power Plant Study

The National Infrastructure, Energy and Water Resources Ministry is studying the feasibility of building a nuclear power plant in Israel, according to a report in the Globes. The study is part of a proposal to reduce emissions by 25% over the next 15 years.

Israel hopes to reduce its greenhouse gas emissions to 7.5 tons a year per capita from 10.5 tons. The country has been emitting 84 million tons of greenhouse gases a year. Until now, Israel has been included as a developing country under the framework of the climate change agreements, and as a result was exempt from the requirement of reducing greenhouse gas emissions. Israel now will be required to make such reductions as part of the climate-change agreement signed in Paris in early December.

Bridge over the Jordan

Israel has issued a tender for the construction of a new bridge across the Jordan River, which would connect it with Jordan, according to the Ministry for Regional Cooperation. The bridge will be part of the Jordan-Gate project for a joint industrial zone between the two countries. The first-ever joint infrastructure project between the two countries is to include two industrial areas and employment zones on both sides of the river, connected by a bridge. Israeli and Jordanian factories are to be built on a 700 dunam (175-acre) tract on the Jordanian side, while the 245-dunam Israeli facility will serve as a logistics base and transportation hub. Israel and Jordan agreed on the project in April.

Chinese Agreement

Israel’s Adama Agricultural Solutions is collaborating with five Chinese firms engaged in crop-protection to develop sales of its products in China. The five Chinese firms, all members of the ChemChina group, are Hubei Sanonda, Jiangsu Anpon, Shandong Dacheng, Anhui Chemical Group and Jiamusi Heilong Agrochemical. The move provides Adama with an established commercial infrastructure to access to the fast-growing Chinese agricultural market, which is already the world’s third largest.

In a parallel development Adama, formerly Makteshim Agan, declared a $100M dividend as part of its reverse merger into Sanonda, a Chinese pesticide company, earlier this year.

Visitor from London

London Mayor Boris Johnson, visiting Israel in early November, has urged more Israeli firms to locate in the British capital. Technology companies, which constitute over three-quarters of all Israeli firms listed on the London Stock Exchange in the last five years, have raised over £240M in London.

From Russia, by Air

Aeroflot is increasing its flights to Israel. The Russian airline plans 37 weekly flights, including four a day on the Moscow-Tel Aviv route, plus flights to St. Petersburg and Rostov.

Finance & Investment

Company Tax Powered

The Israeli government’s Inter-ministerial Committee on Legislation have unanimously approved a 1.5% cut in company tax. The tax will decline from the current 26.5% to 25% on January 1.

Phosphate Deal

Israel Chemicals Ltd. and Namibia’s LLNP Ltd., owned by Israeli diamond mogul and international businessperson Lev Leviev, have agreed to perform a joint feasibility study on building a large-scale maritime mining and phosphate downstream manufacturing business in Namibia. LLNP holds permits and exploration rights to mine an estimated 1 billion tons of phosphate deposits.

Amdocs on the Rise

The work force of Amdocs rose by 10.7% to almost 25,000 in the company’s 2015 fiscal year, according to reports filed by the Israeli provider of business information systems. The company, which is based in Ra’anana, Israel and St. Louis, Missouri, now has almost twice the number of employees in India (9,300) as in Israel (4,700). The largest customers of Amdocs, whose end-of-fiscal-year market cap was $8.2B, include Bell Canada, Deutsche Telekom, Singtel, Sprint, Telefonica and Vodafone.

Hotel Purchase

Israel’s Fattal Hotels, owned by David Fattal and the Leopard Group, its British partner, have signed a deal for the sale of 18 hotels in Germany to Pandox, a Swedish hotel chain. Price for the hotels, which are 18 of 20 Holiday Inns Fattal bought in 2013, is Euro 400M, representing a 322% return on equity to Fattal.

Bond Bonanza

12 U.S. real estate companies have raised more than NIS 8B (about $2.2B) on the Tel Aviv bond market in the past year, according to a report in Calcalist. While noting that the bonds offer interesting new possibilities to Israeli investors, the paper cautions that they are not without a considerable risk level.

Gleitman’s China Fund

Yehoshua (Shuky) Gleitman, former chief scientist in the Israeli Ministry of Trade and Industry, and four Chinese entities have formed a $100M Chinese venture capital fund to invest in Israeli life science companies. A joint Israeli-Chinese team headed by Gleitman will manage the Guangzhou-Israel Bio Fund, whose backers include the municipal government of Guangzhou (formerly known as Canton) and three Chinese companies, among them one of the country’s biggest pharmaceutical firms.

Cloudyn Raises $11M

Cloudyn, a cloud management, monitoring and optimization specialist based in Rosh Ha’ayin northeast of Tel Aviv, has raised $11M in a new financing round led by Carmel Ventures, with the participation of previous investors TitaniumInvetments and RDSeed, a partnership of ElronElectronics Industries and Rafael. Cloudyn‘s “single pane of glass” approach currently is in use to monitor 200,000 virtual machines and 12,000 applications.

KAHR Raises $12M

KAHR Medical, a subsidiary of Jerusalem-based Hadassah MedicalOrganization‘s Hadasit technology-transfer company, has raised $12M from international sources and existing investors, based on a company valuation of $25M. KAHR, which develops novel protein pharmaceuticals for treating cancer and other autoimmune diseases, will devote the new funds to development of dual signaling protein technology of professors from Hadassah and the Jefferson School of Medicine in Philadelphia.

Vayyar Raises $22M

Vayyar Imaging has raised $22M early-stage venture investment firm WaldenRiverwood. Vayaar, based in Yehud near Ben Gurion International Airport, develops sophisticated three-dimensional sensors that can look inside objects, materials and cells including possible applications for the early discovery of breast cancer.

Perfecto Adds New Investors

Perfecto Mobile, a developer of mobile app testing technology under real-user conditions, has raised $35M from a group of investors including TechnologyCrossover Ventures and existing investors Carmel Ventures, Vertex Venture, FTV Capital and GlobespanCapital Partners. Perfecto, which is nine years old, has headquarters in Wobum, Massachusetts and an R&D center in Rosh Ha’ayin, northeast of Tel Aviv.

Mergers & Acquisitions

Tower-Maxim

Tower Semiconductor, based in Migdal Haemek in northern Israel, has signed an agreement with Maxim Integrated Products to purchase Maxim’s 8-inch fabrication facility in San Antonio, Texas for $40M. The purchase will expand the worldwide manufacturing capacity of Tower, which markets as TowerJazz, by 28,000 wafers per month. The availability of additional capacity will serve TowerJazz’s forecast robust customer demand. The deal is expected to close in January.

IPO Fails

An initial public offering for Safe-T, a developer of cybersecurity software, failed to raise the Tel Aviv Stock Exchange’s minimum of NIS 18M. The failure marks a setback for the TASE, which has sought to become a home for young technology companies.

Frutarom Buying Spree

Haifa-based Frutarom Industries, a global player in the flavors and fine ingredients markets, made three purchases in the last quarter of 2015, bringing its acquisition total for all of 2015 to 13 companies. The last purchase was the largest — of Austrian flavors maker Wiberg for Euro 119M ($130.4M), Wiberg has operations in Germany, Turkey, the U.S. and Canada and 2015 revenue is expected to reach $172M. Earlier, Frutarom bought 75% of the share capital of Polish firm AMCo for about $21M. AMCo, founded in 1998, develops savory flavor solutions including seasoning blends, marinades, and functional ingredients for the food industry. Frutarom, with production and development centers on four continents, produces and markets over 43,000 products to over 19,000 customers in more than 150 countries.

The third acquisition was of full ownership in Intentive, a Hong Kong maker of flavorings for dairy and bakery products, for $17M.

Perion-Undertone

Perion Network, a media and Internet services developer based in Tel Aviv, has acquired Undertone of the U.S. for $180M. The acquisition of Undertone, which develops digital advertising solutions, is the third for Perion in the last two years: It purchased MakeMeReach of France for $10-$15M early this year, and GrowMobile of the U.S. for $17M in 2014.

NXP-Freescale

Holland’s NXP Semiconductors and Freescale Semiconductor of Herzliya Pituah, in the high-tech belt north of Tel Aviv, have merged. According to the Globes, the merged company will become a world leader in mixed signal high-performance semiconductors, with a combined revenue in the $10B range.

Revionics-Marketyze

Revionics, the Texas-based developer of merchandise optimization technology. has acquired Israeli firm Marketyze for several dozen million dollars. Marketzye, based in Ra’anana, develops pricing intelligence, merchandising and inventory solutions.

Similar Web-Quettra

Tel Aviv-based mobile and web analytics developer SimilarWeb has acquired Quettra for an estimated $10M. Quettra, which specializes in mobile intelligence, is based in Mountain View, California.

Rioglass Solar-Schott Solar

Israeli company Rioglass Solar, a producer of mirrors and receivers for solar thermal and photovoltaic generation of electricity, is acquiring the receiver business of Schott Solar of Germany, its main competitor. Rioglass previously purchased the thermo-solar receiver business of Siemens in 2013.

Direct Energy-Panoramic Power

Direct Energy, a subsidiary of British energy company Centrica, has acquired Israel’s Panoramic Power for $60M. Headquartered in Kfar Saba and New York, Panoramic Power develops energy management solutions for commercial and industrial companies. Panoramic‘s power-usage sensors have been deployed at 700 sites around the world.

Vroom-Texas Direct

Vroom, based in Nes Ziona south of Tel Aviv and New York City, has raised $95 to fund its purchase of Texas Direct Auto. Both companies are on-line used-car retailers. The combined companies, which will continue to operate as separate brands, anticipate total revenues of $900M.

Vroom, which seeks to deliver cars across the U.S. within 48 hours, operates a reconditioning and fulfillment facility in Dallas and plans to open another one in Indianapolis in early 2016.

Science & High Technology

Hungry Spiders

About 600 million carnivorous spiders raised by Bio-Bee, based at Kibbutz Sde Eliyahu in northern Israel, are being sent to South America to protect agricultural fields in Colombia. The tiny spiders, marketed as Bio® Persimilis, are twice the size of the spider mites that harm crops. According to the company, the Israeli mite can eat large quantities of their harmful counterparts each day, eliminating the need for chemical pesticides.

Teva-Takeda JV

Israel’s Teva Pharmaceuticals and Takeda Pharmaceuticals of Japan have set up a joint subsidiary for the marketing of generic pharmaceuticals in Japan. Teva will hold 51% of the new company, Takeda the remainder. The two companies are already partners in marketing Teva‘s proprietary drugs, Copaxone for multiple sclerosis and Azilect for Parkinson’s disease.

Meanwhile, the U.S. Food and Drug Administration (FDA) has approved Bendeka, an injectable and infusion version of its cancer drug Bendamustine, used to treat certain forms of leukemia and lymphoma. Teva earlier raised $6.7B in a bond issue to finance its $40B purchase of Allergan Generics, which was announced in July.

Radiation Treatment?

Stem cells from Pluristem Therapeutics, an Israeli company, may be used to treat acute radiation syndrome in Japan, which is still feeling the aftermath of the 2011 tsunami and Fukishima nuclear accident. According to a report in the Times of Israel, Fukishima Medical University’s Global Medical Science Center and Pluristem have agreed to develop Pluristem‘s PLX-R18 cells. The deal includes a study of the cells to treat radiation-induced damage to the skin, lungs and gastrointestinal tract.

In its report, the Times of Israel said that radiation from the Fukushima accident has spread around the Pacific Rim, with some signs of contamination discovered as far away as the U.S. West Coast. According to another report, as many as 1 million Japanese could die from cancer induced by radiation in coming years. Pluristem has reported indications that its cells, harvested from the human placenta after childbirth, have reversed the effects of radiation on rats.

Herbicide Collaboration

Evogene, a developer of agricultural chemicals based in Rehovot, southeast of Tel Aviv, has joined forces with chemical giant BASF. Under terms of a three-year agreement, Evogene will use its technology to identify new chemicals with the potential for use as herbicides, and BASF will screen the candidate chemicals to examine their biological effects on weeds.

Teva Patent Upheld

The European Patent Office has ruled that Teva Pharmaceutical Industries‘ patent on Copaxone 40mg/ml, a variant of its blockbuster treatment for multiple sclerosis, is valid until 2030. The patent had been challenged by Synthon, Activis and Myland, which contended that the drug does not represent a real innovation of the Israeli firm’s longstanding Copaxone. A U.S. Federal court ruling that the patent on a 20 mg. version of Copaxone was no longer valid, opening the way for generic versions of the proprietary ethical drug produced by Teva, which itself is a world leader in the production and sale of other generic pharmaceuticals whose original patents have expired.

Lanir’s Basket

Kibo, a subsidiary of Israeli businessperson Noam Lanir’s Apply Advanced Mobile Technologies, has signed a revenue-sharing agreement with the National Basketball Association to create NBA-branded smartphone keyboards. The deal is the first in the U.S. sports market for Kibo, which has signed deals with soccer teams like Real Madrid and players like Cristiano Ronaldo.

Bosch Development Center

German electronics giant Bosch plans to open a development center in Tel Aviv, the Globes has reported. Bosch, which invests 10% of its Euro 5B annual revenue in R&D, already has development centers in Silicon Valley, Moscow, Singapore and Shanghai.

Murder Solved

Police in Connecticut succeeded in solving a double murder with the help of mobile forensics technology from Cellebrite, based in Petah Tikva northeast of Tel Aviv. The killings of Jeffrey and Janette Navin, remained unsolved until police recovered incriminating text messages that had been erased from the cellphone of the murdered couple’s son Kyle, who was subsequently charged with killing his parents in a dispute over money.

Distaff Engineers

100 Israeli high school girls have been selected to take part in Female Engineers of the Future, a special project sponsored by Israel Aerospace Industries and the Yediot Aharonot. Hundreds of female high-schoolers applied to participate in the special training project, designed to promote the involvement of more women in science and technology.

Aerospace & Defense

Arrow 3 Test Success

Israel’s Arrow 3 anti-missile missile system passed a major test in early December, when it intercepted a simulated incoming missile at high altitude outside the Earth’s atmosphere. The Arrow 3, developed by Israel Aerospace Industries with substantial funding from the U.S., used the Super Green Pine radar developed by IAI subsidiary EltaIndustries to identify the target in outer space. Though the trial came shortly after Iran’s reportedly successful test of a long-range missile capable of carrying a nuclear warhead, the Israeli test — over the Mediterranean, west of the Palmahim launch site — was planned long ago, after the failure of a similar trial last year, when the interceptor was never launched due to malfunction in the target missile.

Barak 8 Prospects

IAI anticipates billions of dollars’ worth of orders for Barak 8, its new multi-purpose missile system which the Israel Navy is expected to declare operational within the next few months. The system is designed to protect against multiple threats, including warplanes, cruise, shore-launched and airborne missiles. A Barak 8 battery incorporating IAI subsidiary EltaSystems‘s Adir radar has already been installed on INS Lahav, from which a successful trial was conducted in November.

Defending Gas Fields

The Israel Defense Forces may fit some Israel Navy ships with Iron Dome-type missile-defense systems to protect Israel’s offshore gas fields. According to a report in the Haaretz, the Navy plans to test the system on warships in the near future. The measure is said to be a temporary one, until new vessels on order from Germany, which will be specifically designed for oil-field defense, arrive towards the end of the decade. To defend the offshore fields against a possible massive attack by missiles, airborne reconnaissance — including the leasing of “satellite hours” from orbiting satellites — will be intensified. An unnamed senior naval officer quoted by Haaretz said: “we must assure that the gas continues to flow. There is no other option, because there are no other energy reserves.”

More F-35S?

Israel is considering the purchase of an additional squadron of F-35B aircraft, according to a report on the Hebrew Walla! website. It said that the Israeli and U.S. air forces have been discussing the possible acquisition of F-35B STOVL warplanes with the capability of taking off vertically, like helicopters. Israel currently has 34 F-35 Stealth warplanes, made by Lockheed Martin, on order. The F-35B STOVL needs only a 500-meter-long runway to take off.

Airbus Missile Defense

Elbit Systems has successfully test of its MUSIC protection system against shoulder-held anti-aircraft missiles on Airbus airliners. The test on an Airbus C295 aircraft, in cooperation with Airbus Defense and Space (Spain) and NATO officials, took place in October at the Bundeswehr test site in Meppen, Germany. Initial test results indicate that the system can jam and divert incoming first, second and third-generation MANPADS (infra- red, ground to air heat seeking Man-Portable Missiles). The test took place before an Airbus A321 airliner was brought down, apparently by a bomb placed in its cargo hold, shortly after taking off from Sharm al-Sheikh in Egypt.

Revolutionary Radar

Terra, a new radar system introduced by IAI, is a dual-band radar system that optimizes early-warning, detection and accurate tracking of very long range targets such as ballistic missiles, satellites and air-breathing targets. Developed and produced by IAI‘s Elta subsidiary, Terra includes Elta‘s Ultra UHF band and Spectra S-band very-long-range search and track radars. Automatic handover between the two systems is said to enhance performance and improve target load sharing, creating what IAI officials call “a picture in the sky.” The Israel Today calls Terra one of the world’s most advanced radar systems.

Hermes 900 Now Operational

The Hermes 900 unmanned aerial vehicle system, developed by Elbit Systems, became fully operational with the Israel Air Force in mid-November. Nicknamed Kohav (Star), the Hermes was called on to perform hundreds of operational missions over the Gaza Strip in Operation Protective Edge during the summer of 2014, but was later grounded while it became fully integrated into IAF operations. Hermes 900, a medium-altitude, long-endurance air vehicle, can carrying a wide variety of sensors, including some previously operated introduced on manned aircraft and ground systems. The system has been sold to Brazil and Switzerland.

Swiss Contract

Elbit Systems, Israel’s largest private defense contractor, has won a $200M contract to provide Hermes 900 HFE unmanned aerial vehicle systems to the Swiss Defense Ministry. The systems, to be delivered over four years, feature advanced all-weather reconnaissance capabilities.

Pratt & Whitney Gets IAF Deal

The Israel Ministry of Defense and Pratt & Whitney of the U.S. have reached agreement on a deal valued at over $500M for regular maintenance of Israel Air Force warplanes engines. Pratt & Whitney will maintain the engines used in the IAF’s main combat planes, the F-16I, called Sufa (Storm) in Israel, and the F-15, called Ra’am (Thunder), for 15 years. The agreement covers regular maintenance work on the engines, logistic prognostication, renovation and upgrading of the airframe and a rapid supply of spare parts.

Engine Deal

Israel’s Beit Shemesh Engines has been awarded a $35M follow-on deal to provide engine parts to MTU, the German aerospace firm. The deal includes $8.5M worth of new narrow body parts to Germany’s Geared Turbofan, and $26.5 in engine parts for MTU executive jets.

New Tactical System

Government-owned IAI has unveiled Moriah, a new tactical communications system that connects observation posts and allows troops in the field to transmit highly accurate targeting information to air, naval and artillery units. IAI sources say that in addition to improving accuracy, use of Moriah can effectively reduce collateral damage to civilians located near potential targets. According to press reports, the system is already operational and is in the process of being sold to “international customers.”

IDF Developing Electric Vehicles

The Israel Defense Forces is developing the prototype of an electric-powered armored personnel carrier, according to a report in the Yediot Aharonot. Field testing is due to start next year.

The paper says that while electric power would involve considerable savings on fuel, possibly increase maneuverability and make operation quieter, there are still limitations. The most serious is that with current storage technology, operational range of such vehicles would be limited. In the initial stage at least, tests will include a combination of internal combustion and electric power for IDF vehicles.

Kfirs to Argentina?

Signing of a purchase agreement for 10 Israeli Kfir jets has been delayed by Argentina. According to press reports, the delay — and possible cancellation — of the agreement was connected to Argentina’s recent elections and opposition to signing before a new government is formed in Buenos Aires.

Israel Aerospace Industries (then Israel Aircraft Industries) manufactured the Kfir from the mid-1970s to the middle of the 1980s, and was sold to a number of foreign air forces. IAI is now selling out-of-service Israel Air Force jets refurbished and refitted to a state described as “zero flying hours.” The planes have been fitted with air-to-air missiles from Rafael and advanced radar from IAI subsidiary Elta, said to provide capabilities a modern fighter jet at much lower cost.

Elbit’s Polish Deal

Elbit Systems has won a contract to provide a live combat-training system (CTS) to Poland’s Special Operations Forces (SOF). CTS, an advanced, highly-realistic simulations-based trainer, has been specifically designed for marines and SOF, ranging from individual soldiers up to full-size units, can be used to simulate a wide array of operational conditions including urban, rural and indoor environments. The “train-as-you-fight” system is being provided in cooperation with RUAG Defense of Switzerland and Autocomp Management Ltd. of Poland. Value of the deal was not announced.

Mini Attack Robot

Israel’s Rafael has unveiled Rambot, its new mini-attack robot. Remote-controlled Rambot, which is man-portable, lightweight and capable of carrying an explosive warhead, can locate targets that are out of the line of sight and inside buildings, extending the presence of combat forces in unknown and high-threat environments with a reduced level of danger. Rambot, which weight only 2 kg, has three main components – the IRIS robotic platform, a warhead-attack payload and a remote-control command unit.

Plan to Shorten Military Services

Draftees inducted into the Israel Defense Forces in the year 2020 will be required to serve only 30 months, the ministries of Defense and Finance have agreed as part of ongoing budget discussions. Women’s service will remain as it is, at two years.

Cockpit to Bike Path

Some of the technology developed for pilots of warplanes will soon be available to bicyclists. Everysight, a spin-off of defense contractor Elbit Systems, is due next year to launch a line of smart-sunglasses for cyclists that look and feel — at least at first — like the kind of specs the bicycle set is accustomed to wearing. But they’re not. Raptor smart glasses will include Everysight Beam technology, offering sharp displays of information right in the wearer’s line of sight. According to the manufacturers, Everysight Beam avoids peripheral distractions, reduces eyestrain and has no opaque elements that interfere with the view of what’s ahead.

New Rafael CEO

Yoav Har-Even, a reserve major general who formerly headed the IDF Operations Directorate, has been named as the new CEO of Rafael Advanced Defense Systems. Har-Even succeeds Yedidya Ya’ari, who recently retired after 11 years.

Shaky IAI Report, Elbit Stable

State-owned IAI reported a $31M loss for the third quarter of 2015 and an 11% decline in sales to $828M, compared to $934M for the third quarter of 2014. Order backlog has also declined to $8.5B, from the all-time high of almost $12B at the end of 2012. Most of the decline came from lower military sales.

Meanwhile, Elbit Systems reported third-quarter revenues of $764.8M, up from 5.8% from the parallel quarter of 2014’s $722.7M. Elbit attributed the increase to higher income from land systems in the Asia-Pacific region. Elbit‘s backlog of orders was $6.4B, up marginally from the $6.2B at the end of 2014’s third quarter.